Ways to End Labour Disputes

A conflict in the workplace can arise from various causes and an employer may raise a concern on the method of dispute resolution to be adopted when an employee brings an action against the employer, or the appropriate method of dispute resolution to be adopted in the applicable employment agreement. The following are the three main approaches to solve labour disputes:

1. Lodging a Complaint with the Labour Inspector

This approach can only be followed in a dispute related to the legal provisions under the Labour Protection Act B.E. 2541 (1998) (the “LPA”), because the law only empowers labour inspectors within this legal framework, according to Section 123 of the LPA; such as when the employer violates or fails to comply with an employee’s entitlement to receive wages, overtime pay, severance pay etc., which are considered statutory payments under the LPA.
For your information, Section 123, paragraph 1 of the LPA states in essence that:
“Where an employer violates or fails to comply with an employee’s entitlement to receive any payments prescribed under this Act, and the employee wishes the labour inspector to enforce the entitlement under this Act, the employee is entitled to lodge a complaint, in a form prescribed by the Director-General, to the labour inspector of the locality in which the employee works or the employer’s domicile is located.”
Matters outside the scope of the LPA cannot be referred for the labour inspector’s consideration. For example, an employee cannot file a complaint with the labour inspector on whether or not the employee shall be entitled to any other welfares and benefits under the employment contract, or damages for unfair dismissal, because they are not legal issues under the LPA.
It is important to note that, by virtue of Section 139 of the LPA, the labour inspector is also empowered to monitor the employer’s compliance under the LPA even if there is no complaint lodged by an employee, including but not limited to: randomly entering the place of business or the office of an employer and the workplace of an employee during any hours of work, in order to examine the working and employment conditions of the employees; inquiring any facts, issuing an inquiry notice or serving a summons on an employer, employee or other relevant persons to give factual statements, or submit objects or relevant documents for consideration; and issuing relevant orders for the employer or employee to comply with any particulars under the LPA.

2. Filing a Lawsuit with the Labour Court

This approach can be followed for any claim pertaining to labour disputes, and not limited to merely the disputes under the LPA, e.g. disputes in relation to a claim for compensation for damages from unfair dismissal under the Act on the Establishment of and Procedure for Labour Court B.E. 2522 (1979) (the “LCP”), or disputes in relation to a claim for compensation for breach of employment contract under the Civil and Commercial Code (the “CCC”). As explained above, the labour inspector has no authority to issue orders pertaining to the said two disputes since they are beyond the scope of the LPA.
As for the disputes arising under the LPA, an employee has a right to refer the matter on the employer’s obligations to make any payments or proceed with any actions as required by the LPA to either the labour inspector or the labour court; not to both.
However, when the matter is referred to the labour inspector, it is possible for the party disagreeing with the labour inspector’s order to refer the matter to the court to re-consider the matter and issue an order to withdraw the labour inspector’s order. If this is such the case, the disputes will be commenced with the labour inspector and continued in the labour court. Generally, if the employer would like to refer the case initiated by an employee with the labour inspector, who has already issued an order, to be further considered by the court as explained above, the employer will be required to place money with the court equal to the outstanding amount due to be paid according to the said inspector’s order; otherwise, the case will not be accepted by the court for consideration. Unlike the case of the employer, an employee is not obliged to place any money with the court in order to be able to refer the case for the court’s consideration. It is also important to note that there is a certain timeline whereby the case has to be referred to the court; otherwise, the labour inspector’s order will become final. The employer’s failure to comply with the labour inspector’s final order can also be subject to criminal offences.

3. Submitting a Case for Arbitration

This approach can be followed if it is expressly stipulated in the contract between the employer and an employee that either party can refer disputes arising thereof for arbitration. However, not all types of labour disputes can be dissolved by way of arbitration, e.g. some disputes relating to the rights and obligations of the parties under the LPA and LCP which focus on protecting the rights of an employee from being exploited by the employer are considered as issues relating to public order and good morals of the people of Thailand - and therefore the parties cannot agree to dissolve such disputes by way of arbitration (Supreme Court’s decision no. 8335/2560). Apart from such limitation, the parties can refer other disputes to the arbitral tribunal for consideration, provided that they are civil related-matters where the parties are entitled to agree differently from what is prescribed by law, e.g. claiming for the loss of benefits from the remaining work under an advisory services contract (Supreme Court’s decision no. 8627/2550).
Generally, arbitral awards are final in the essence of disputes. However, in order to enforce an award, parties may need to refer the matter to court. There are also some statutory grounds for which the parties may claim or the court may issue an order refusing enforcement of the arbitral awards, e.g. the party against whom the award is invoked was not given proper prior notice of the appointment of the arbitral tribunal or of the arbitral proceedings, or was otherwise unable to present his/her case to the arbitral proceedings.

Regardless of the approach, dispute resolution through full litigation proceedings is both cost and time consuming. Therefore, involved parties are strongly recommended to avoid any disagreement from the outset, and an amicable settlement approach through a negotiation or mediation process should not be taken for granted.

This is intended merely to provide a regulatory overview and not to be comprehensive; it is NOT a provision of legal advice. Should you have any questions on this or on other areas of law, please do not hesitate to contact the following:

Chanakarn Boonyasith
Partner
Pattaranun Hanwongpaiboon
Associate

Authors

Chanakarn BOONYASITH

Partner
Bangkok

Chanakarn has particular in-depth expertise in the practical side of the legislative system of labour & employment law and personal data protection law. For the Labour & Employment practice, she engages in both advisory work and litigation, as well as drafting and reviewing legal documents, negotiating settlements, interviewing employees (particularly those accused of wrongdoing), managing whistleblowing hotlines and processes, providing trainings and various types of employment law advice, and representing clients in numerous court cases and in hearings before the labour authorities. For the Personal Data Protection practice, she assists her clients through the entire process, from providing training, analysing how clients handle personal data transactions, summarising clients’ data flow, providing legal advice, and drafting necessary legal documents for her clients. Chanakarn’s strategy is to provide detailed, accurate advice and flexible solutions, adapted to meet her clients’ needs. She excels in simplifying complex matters and equipping her clients to make the right decisions. She receives consistently strong feedback from her clients regarding the quality of her work. She has been ranked for labour and employment practice in Chambers Asia Pacific 2022 and 2023.

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